Boris Johnson: EU can ‘go whistle’ over Brexit bill

European Union leaders can “go whistle” if they expect the U.K. to pay a large Brexit divorce bill, Foreign Secretary Boris Johnson said Tuesday.

Speaking in the House of Commons, prominent Brexiteer Johnson said reported estimates of the money the U.K. will owe upon leaving the EU — figures of €60 billion and even €100 billion have been mentioned — were “extortionate.”

Tory Euroskeptic Philip Hollobone told parliament the U.K. had paid “a total of £209 billion” into the EU coffers “since we joined the common market on January 1, 1973.”

He asked Johnson, “Will you make it clear to the EU that if they want a penny piece more then they can go whistle?”

The foreign secretary replied: “I’m sure that your words will have broken like a thunderclap over Brussels and they will pay attention to what you have said.”

“I think that the sums that I have seen that they propose to demand from this country seem to me to be extortionate and I think ‘to go whistle’ is an entirely appropriate expression.”

Johnson also told the House of Commons that there was “no plan for no deal” on Brexit, because he was confident Britain would get a “great deal.” The chance of there being no Brexit deal, he said, were “vanishingly unlikely.”

Prime Minister Theresa May’s official spokesperson said Tuesday: “Our position has not changed. We have said contingency planning is taking place for a range of scenarios.”

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YellowSubmarine

Perhaps the EU could offer us $60 billion to stay in ? a payment every ten years would probably work. 😉

Posted on 7/11/17 | 4:55 PM CET

F1R5S4

@yellow submarine:

More likely the EU27 are going to tell BoJo he can stick said ‘whistle’ unowhere….

Posted on 7/11/17 | 5:05 PM CET

Elena adaal

Boris Johnson is a funny guy: “I’m sure that your words will have broken like a thunderclap over Brussels….”. I love the sarcasm.

He then carefully steps over the ludicrous argument of the MP and tells that the sum the EU asks is too high and they can ‘go whisle’. On the face of it it’s a big tell-off, but he actually only says that the UK wants to pay less. Hardly controversial.

The reponse of the May spokesperson is – as often – a wonderful example of words without any meaning.

From the looks of it the money owned to the EU is going to be paid.

Posted on 7/11/17 | 5:34 PM CET

Chris

Everyone knows that a large bill for the UK is the only thing that the other 27 countries are going to agree on. Of course there is the risk that if they ask too much the UK will just walk away. So what exactly is too much ? That could be decided in two ways …

A) The UK currently pays roughly £10 Billion net per year. For that it gets frictionless trade with the EU. Let us imagine the UK can negotiate a post-brexit frictionless trade deal with a divorce bill of £50 billion. This is the equivalent of only 5 years subscription. If the UK is allowed to pay in yearly £10 billion pound instalments it would make no difference to our yearly payments. And after 5 years the UK gets to eat as much cake as it likes for free.

B) The other way is the way one checks a bill at a restaurant. If you think that recently the food has become less appetising and you don’t trust the waiter you’ll go through it line by line to see if something you didn’t order is on the bill. And if you think the waiter has been spitting in the soup, don’t expect a tip to be added.

It is these two approaches that highlight the problems there will be over the exit bill. The EU thinks that approach (A) is the way things should be done. After all, relative to many other EU countries the UK is a rich country. The EU will suffer from the UK leaving, so the UK should pay. And perhaps the EU could have succeeded with that approach if they had any diplomatic skills. But they don’t.
Instead they are driving the UK to use approach (B) by insisting that the way the bill is calculated must be agreed before any progress on a trade deal. The UK is now going to look in great detail at the way the bill is concocted.
It seems to me that the EU is not being consistent about the way it does this. It wants to charge the UK for the pensions of UK civil servants who worked for the EU and for who the EU will have a future pension liability. It also wants to charge the UK for its share in long-term projects that will still need funding after brexit has happened.
Why is this inconsistent? The UK is the first country to leave the EU (sorry Greenland – I’m ignoring you). However, there have been many occasions where countries have joined the EU (and EEC). So when the UK joined the EEC in 1973, did the EU pay the UK a joining bonus? Why should it have paid the UK a joining bonus? For exactly the same reasons. UK subscriptions to the EEC would be used to fund pensions of people who had been working at the EEC before the UK joined and the EU would be funding projects decided before the UK joined. The same argument could be applied to any country that joined the EU or EEC not as a founder member. My point is that if the EU had been giving bonuses to compensate joining countries for these items, it would have a right to charge for these items when countries left. But it doesn’t.

Posted on 7/11/17 | 6:34 PM CET

tony

elena

you said

‘From the looks of it the money owned to the EU is going to be paid.’

the money genuinely owed to the EU was always going to be paid. Who told you otherwise?

It is money NOT owed that we will dispute and as one of the major contributors in this 40 year long marriage we also want a share of the assets, including the money we have in the Investment bank

Posted on 7/11/17 | 6:48 PM CET

Elena Adaal

@Cris

The exit payment and “frictionless” trade have nothing to do with each other. The exit payment is simply the payments that were already agreed upon. There will be some talk about what that is, but that is basically it.

Trade is entirely different: Now you are in the single market and in the customs union. Frictionless trade is possible because we (and you) can trust that products are made to common standards, and no slave labour is used or environmentally damaging stuff is done. If there are problems we can go the ECJ and rulings apply in every single market country. If this falls away, “frictionless trade” is simply not possible anymore – no matter how much you pay – because we cannot be sure you respect the rules and cannot enforce these anymore.

If it is in the common interest of the EU and the UK we can make a Canada-style trade deal, but trade will not be frictionless anymore.

@tony: for sure you have to pay only what is owned.
A share of the EU assets: not possible; you did not have to ‘pay in’ when you joined, and you will not get stuff if you leave. It’s not yours anymore.

Posted on 7/11/17 | 7:08 PM CET

S.Alexander

Oh no! Not the 100bln pink unicorn bill again!

Guys! Once and for all please do understand that this ludicrous number emanated from a Financial Times editor’s arse without any source or base given whatsoever. It used to be 60bln in their first article but then they just upped it just because 100bln is a more round more antagonic number.

Just let it go already.

Posted on 7/11/17 | 7:54 PM CET

S.Alexander

@Elena Adaal

I think Tony mostly means the shares owned ny UK in the ECB. ECB does not give money for free. It lends money with a very low interest rate. Honestly, after an independent panel evaluates UK’s share value, it should be included in the divorce proceedings.

Posted on 7/11/17 | 7:57 PM CET

Jodocus5

Well … whatever. Nobody can expect us or anyone else to take Mr. Johnson seriously.

It’s no use trying to explain the concept of “paying the net present value of promised future cash flows” to that dude. He either doesn’t grasp the concept or doesn’t want to grasp it.

Since satisfactory progress on this issue is a precondition for successful conclusion of the Brexit talks (and an exit agreement) it’s lucky for the UK that Mr. Johnson is not in charge of the negotiations. If he still wants to waste time by stalling, that’s his lookout.

There is one bright spot however. Even this boyo seems to have been disabused of his wildly unrealistic ideas about having one’s cake and eating it. Perhaps it’s only a matter of time.

Posted on 7/11/17 | 8:06 PM CET

Chris

@ Elena

True. In an ideal world the exit bill and the trade deal would have nothing to do with each other. However, if that were the case the EU would make its intentions about getting a trade deal known clearly. Anticipating that a trade deal can take so long, they would also have ensured that talk on trading arrangements started straight away. Instead they are playing ‘hard to get’.
The UK has consistently made clear that a fair settlement of debts from both sides is part of the exit process. The problem is that the EU is desperate for money, and thinks it can get more even money out of the UK if it threatens not to have a deal.
I take your point about frictionless trade. Getting a trade deal with the EU is going to be tricky. And you highlight the exact area where the problem is going to appear – conflict resolution. This is the mechanism that ensures that trade is free and one of the parties does not put up unfair barriers to trade. The UK position is that expects that a fair arbitration mechanism will be set up. This could be a committee of UK, ECJ and external members or maybe use an establish arbitration organization such as the International Center for Settlement of Investment Disputes (ICSID).
The big problem is that the EU doesn’t like such collaborations. People in Europe hate the idea that the EU might ever lose out on a ruling. This was why the TTIP deal with the USA failed. It was why the CETA deal so nearly fell apart and I believe it is still to be resolved on the rather prematurely announced deal with Japan. So the problem is not really that the UK will not accept the ECJ as sole arbitrator (using one side as judge is never done in trade deals) rather the problem is going to be with the EU refusing to enter into an appropriate fair mechanism.

Posted on 7/11/17 | 9:44 PM CET

Elena Adaal

@S.Alexander
The ECB is afaik a bank, and any state that invested money in that can take it out if proper procedures are followed. There should not be any problem there. Its different with EU buildings, the wine cellar, etc. These are owned by the EU, not the states.

@Chris: Conflict resolution in trade disuputes can be done by separately set-up bodies, but their influence is far less than what we have in the single market. The ECJ is just the ‘tip of the iceberg’. Below it are a host of rules that limit unfair competition. the reason that Ireland is forced to require Apple to pay profit tax is that in the single market there is a rule agains state aid. So the government of Ireland is sued and they must comply (after their appeal has failed).

The problems that people in the EU has with these other bodies is that they offer investment protection that can undermine state sovereignity. We are not unique in that fear.

As said: the EU and the UK can do a Canada-style trade deal with separate dispute settlement, but it will not come close to the single market/custom union.

Posted on 7/11/17 | 10:33 PM CET

François P

Spot on Elena 🙂

Posted on 7/11/17 | 10:56 PM CET

Honest Dave

@Elena – “Its different with EU buildings, the wine cellar, etc. These are owned by the EU, not the states.” Actually you’re more right than you know. The liabilities are EU liabilities and are not legally the member states. Starting to think there’s some substance to this go whistle comment.

Posted on 7/11/17 | 11:28 PM CET

European

If England (PM May) still had character, it should get rid of this clown on the spot. He belongs in a circus, not in politics.

Posted on 7/11/17 | 11:55 PM CET

Peter Dow

“Extortionate” agreed.

The EU should GO RAISE THE EUROZONE’S BORROWING CAP from 3% of GDP by 5% to 8%.

Paying them 5% of annual Eurozone GDP of €10,000 billion or €500 billion, a year, every year.

Now EU, do you want to take the money – €500 billion, a year, every year – or do you want to go whistle?

The choice is EUrs.

Deal, or no deal?

Posted on 7/12/17 | 12:35 AM CET

Chris

@Elena

The ECJ has the role of a trade arbitrator. However, it is just carrying out the will of the EU. The trouble is that EU is far too political to allow the ECJ to do this job fairly. The fine for Apple was just a populist money grab. I can’t stand Apple, but I have sympathies for the way they have been treated by the EU. The tax rates available to Apple in Ireland are open to all in Ireland. It is not the consumer that has suffered in this case. It is other countries who are applying tax rates that encourage businesses to leave, but are too greedy to cut them. That is surely an enormous example of an arbitration body attempting to undermine state sovereignty.
However I notice you do not mention the biggest example of unfair competition in the single market – the Common Agricultural Policy. It’s role is to raise prices so that producers get more profits at the expense of consumers who pay higher prices. It hands out huge bucketfuls of state aid to domestic producers and makes it extremely difficult for non-EU market penetration in EU markets. And it is the CAP that makes it so difficult for the EU to strike trade deals with other countries.

Posted on 7/12/17 | 12:49 AM CET

Elena adaal

@chris
Apple made a deal with the Irish to pay essentially no profit tax. This is textbook state aid, since all other companies do have to pay the – already low – Irish profit tax. The rate of 0.05% was not available to other companies. This has hurt other companies, and indirectly consumers in the whole EU.

Often the ECJ is a shield that protects EU citizens and companies against abuse of power.

The CAP may be strange, but protecting domestic agriculture is what many if not all countries do. At least we have the same policy in the whole of the EU.

Posted on 7/12/17 | 7:26 AM CET

Chris

@Elena

Under Irish law the state of Ireland is only entitled to tax non-resident companies on economic activities that take place in Ireland. Under Irish laws the bulk of Apple’s tax burden should fall in the USA where the products are created, designed and engineered. The “rate” of 0.05% that is often quoted in the press is not the result of a special deal with Apple, rather it as a notional average over taxable profits that are taxed at the standard tax rate and non-taxable profits which the Irish government is not entitled to tax.
The Irish government rejects the arguments of the EU, saying that the EU’s decision is not based on Irish or EU law and that the Commission is trying to rewrite Irish corporate tax rules.
You claim that Apple has indirectly hurt consumers through this. How? It is certainly not through lower prices. I never buy any of their products because they are so expensive. There are far better products available in the EU for much lower prices. In my opinion, buyers of Apple products are paying an enormous tax on their own stupidity (to Apple). Interestingly, amongst my friends there is a very strong correlation between those who voted to remain in the EU and those who use Apple products. They think they are using the best product out there, but actually it is very expensive and there are far better alternatives.

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